HGGC

HGGC
Private Ownership
Industry Private Equity
Founded 2007
Headquarters Palo Alto, California, United States
Key people
 Gregory M. Benson, Leslie M. Brown, Jr., Gary L. Crittenden, Richard F. Lawson, Jr., J. Steven Young
Total assets $2.4 billion[1][2][3][4]
Website www.hggc.com

HGGC is a leading middle-market private equity firm that was named 2014 M&A Mid-Market Private Equity Firm of the Year by Mergers & Acquisitions magazine.[5] HGGC is based in Palo Alto, California, and has over $2.4 billion of cumulative capital commitments.[2] HGGC is distinguished by its "Advantaged Investing" model, which enables the firm to source and acquire scalable businesses at attractive multiples through relationship investing with founders, management teams and/or sponsors who reinvest in deals alongside HGGC—thus creating a strong alignment of interests.[6] Since inception in 2007, HGGC has completed platform investments, add-on acquisitions, recapitalizations and liquidity events with aggregate transaction value of nearly $10 billion, representing more than 45 individual investments.[6]

HGGC is led by noted private equity executive and visionary Richard F. Lawson, Jr., who serves as CEO, former Bain Capital executive Gregory M. Benson, former Nutraceutical International (NASDAQ: NUTR) CFO Leslie M. Brown, Jr.,[7][8][9] former Citigroup (NYSE: C) CFO Gary Crittenden and NFL Hall of Fame Quarterback J. Steven Young, who represent a unique blend of investor-operators capable of bringing operational know-how and leadership to middle market portfolio companies.[5]

History

HGGC was originally co-founded as H&G Capital Partners by Messrs. Benson, Lawson and Young alongside Jon M. Huntsman and Robert C. Gay. Prior to co-founding H&G Capital Partners, businessman and philanthropist Jon M. Huntsman founded Huntsman Chemical Corporation, the largest manufacturer of polystyrene in the United States. Robert C. Gay was a long-time Bain Capital managing director, who gained additional prominence due to his connection to former Bain Capital alumnus and presidential candidate Mitt Romney.[10]

Shortly after launching as H&G Capital Partners, the firm was sued in 2008 by H.I.G. Capital, which argued that the H&G name would cause confusion with H.I.G. in the marketplace. H&G Capital Partners agreed to change its name to Huntsman Gay Global Capital in recognition of two of its most senior founding partners.[11]

Robert C. Gay, who had served as CEO of Huntsman Gay Global Capital since inception, accepted a calling in March 2012 to work full-time with The Church of Jesus Christ of Latter-day Saints as First Quorum of the Seventy.[12] Following Mr. Gay’s departure, Gary L. Crittenden assumed the role of CEO at Huntsman Gay Global Capital. A year later, in 2013, Huntsman Gay Global Capital rebranded itself once again to the simpler HGGC, along with making some top management changes. Richard F. Lawson, Jr. became CEO, taking over from Gary L. Crittenden, who became Chairman.[12][13]

Fund I

HGGC’s debut fund (Fund I) held a first close in March 2008 and a final close in March 2009. Fund I received $1.1 billion of investor commitments, ahead of its original $1 billion target.[1] In May 2008, CalPERS made a $180 million commitment to this initial private equity fund.[14][15]

Fund II

HGGC’s second fund (Fund II) held a first close in March 2014 and a final close in March 2015. Fund II received $1.3 billion of investor commitments, surpassing a $1 billion target and reaching a $1.25 billion voluntary hard cap, which excluded the firm’s GP commitment of $80 million. Notable investors in HGGC Fund II include PKA-AIP of Copenhagen, Denmark, which committed $125 million and OPTrust of Toronto, Canada.[2][3][4]

Investments

HGGC invests across a range of industry sectors, including tech and tech-enabled services, business services, financial services, consumer and industrials. HGGC’s investing focus is typically on middle-market companies that have $100 million to $1 billion in annual revenues. HGGC primarily focuses on North American investments, although not exclusively.[16]

Early Fund II investment transactions include AutoAlert, which provides cloud-based data and analytics services to the automotive market; Pearl Holding Group, an insurance-services company; Serena Software, an information technology business; and Survey Sampling International, which provides data and technology services for consumer and business-to-business research.[5]

Representative Fund I investments include MyWebGrocer;[17] Citadel Plastics Holdings, which has been announced as under contract for sale to A. Schulman (NASDAQ: SHLM) for $800 million,;[18] Hollander Sleep Products, which sold to Sentinel Capital Partners;[19] hybris, an e-commerce business that was sold to SAP for $1.5 billion;[20] and Sunquest Information Systems, which sold to Roper Industries (NYSE: ROP) for $1.415 billion.[21]

Trademark dispute

H&G Capital Partners logo prior to the 2008 rebranding
Huntsman Gay Global Capital logo after the 2008 rebranding

After naming the firm H&G Capital Partners, Miami-based private equity firm H.I.G. Capital sent a letter to H&G Capital Partners in March 2008 demanding that the firm change its name. H.I.G., which also makes private equity investments in middle market companies in the United States, claimed that the similarity of the two names would cause confusion in the market. H.I.G. subsequently sued H&G Capital Partners, hoping to prevent H&G Capital Partners from using the name.[11] Previously, H.I.G. had been at the receiving end of similar litigation in Europe. In 2007, HgCapital, a European private equity firm had launched a trademark infringement lawsuit against H.I.G. Capital after it intensified its efforts in Europe.[22]

H&G Capital Partners eventually abandoned its name, ultimately adopting the Huntsman Gay Global Capital moniker, which was later changed to HGGC.

References

  1. 1 2 Huntsman Gay Closes 1st Fund at $11 billion. New York Times, Julty 15, 2009
  2. 1 2 3 Allison Collins. “HGGC’s Final Close of Second Fund Illustrates Strength of Succession Plan.” Mergers & Acquisitions, March 4, 2015.
  3. 1 2 http://www.pkaaip.dk/portfolio/
  4. 1 2 Limited Partner Magazine. https://lpgp.net/sites/lpgp.net/files/lp-gp-mag.pdf
  5. 1 2 3 Mary Kathleen Flynn. “HGGC Thrived in Transition to Reap PRIVATE EQUITY FIRM OF THE YEAR.” Mergers & Acquisitions, March 23, 2015.
  6. 1 2 Iris Dorbian. “HGGC to buy market research company MRops.” PE HUB, March 16, 2015.
  7. ↑ “Nutraceutical of Utah sees stock rise 19%” Deseret News. August 20, 2002.
  8. ↑ “Huntsman Gay Global Capital Closes $1.1 Billion Private Equity Fund.” Business Wire, July 15, 2009.
  9. ↑ bap.byu.edu/2013/02/les-brown-huntsman-gay-global-capital.html. Beta Alpha Psi, Gamma Alpha Chapter, Brigham Young University, February 22, 2013.
  10. ↑ Bloomberg http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=40266198
  11. 1 2 "H.I.G. Battles H&G In Name Dispute." Buyouts, April 28, 2008.
  12. 1 2 Fortune http://fortune.com/2012/04/02/exclusive-bob-gay-leaving-huntsman-gay/
  13. ↑ The Wall Street Journal http://blogs.wsj.com/privateequity/2013/08/29/hggcs-next-play-a-new-fund/
  14. ↑ CalPERS Alternative Investment Management Program. http://www.calpers.ca.gov/eip-docs/about/board-cal-agenda/agendas/invest/200805/supplement-may08/part-d.pdf (May 2008).
  15. ↑ CalPERS com`mits nearly $1bn to TPG. Private Equity Online, May 8, 2008.
  16. ↑ Bloomberg. http://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=40266198
  17. ↑ Jerry Soverinsky. “All for One – HGGC applies an old-school PE approach to acquiring MyWebGrocer. Middle Market Growth. May 1, 2014.
  18. ↑ Angela Chen. “A. Schulman to Buy Citadel Plastics for $800 Million.” The Wall Street Journal, March 16, 2015.
  19. ↑ Iris Dorbian. “HGGC exits Hollander Sleep Products.” PE HUB, October 22, 2014.
  20. ↑ Amy Or. “RISING STAR: Hudson Smith Jr. Brings Inside Perspective to HGGC Deals”. Private Equity Analyst, May 28, 2014.
  21. ↑ “Roper Industries Completes Acquisition of Sunquest Information Systems.” August 23, 2012. http://www.roperind.com/roper-industries-completes-acquisition-sunquest-information-systems
  22. ↑ James Mawson and Paul Hodkinson. "HIG and HgCapital spat over name reaches court." Dow Jones Financial News, June 16, 2008.

External links

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